Toxic

ADVICE modified

They finally sold their house. Rejoice.

In doing so, the real estate agent had asked them to fill out one of those property disclosure forms, full of inane questions that Bill and Joyce hardly thought about. After all, the house was in great shape. When they came to the question, “Are there any water or moisture issues with the basement,” they answered ‘no.’ And why not? A past leak had been repaired and remedial actions taken.

Before firming up the deal, the buyer conducted, and paid for, a thorough home inspection. The guy found nothing of concern in the basement, including no signs of water damage.

Months after the deal was done and the house had changed hands it rained bejesus hard and the basement flooded. Upon inspection is became apparent this had happened because the gutters were clogged and the downspouts had been moved. The new owner sued the sellers, alleging that they lied when they filled out the disclosure form – even though the statement that there had been no water issues was correct.

But the buyer won. The court ruled the sellers made a false statement because they should have known the question on the disclosure form not only referred to the current condition of the house, but to the property’s entire history. And, in the past, there had been water damage. Furthermore, the sellers should have known that improper gutter or drain maintenance would cause flooding, and disclosed that, too.

Bill and Joyce had to write a cheque for $34,000, plus court costs, and hand it over for the reconditioning of the basement.

This is a true story. There are many more.

In fact, a lawyerly column in the Toronto Star a day or two ago made a similar point. In Thunder Bay (where the real estate cartel has made it mandatory that sellers sign a property disclosure form) Vance and Dorothy Overacker sold their house for $392,000 after answering ‘no’ to the same question as above.

Because of a high water table they’d always relied on the sump pump, and three years before selling had experienced a flood. The received $35,000 from the insurance company to fix the problem, and thereafter considered the issue solved. So, the realtor said, just answer that question in the negative. They did.

After closing, the buyers had problems with the sump pump and found water had saturated the septic bed. They sued the sellers for misrepresentation, arguing that had they known there were problems, they’d never have done the deal. The courts agreed. Vance and Dorothy were found guilty of wilful misrepresentation and making statements (on the disclosure form) that were untrue, inaccurate, incomplete or misleading.

The buyers walked away with a cheque for 30% of the house sale price – almost $118,000 – plus the sellers had to pay heavy legal bills. They sued their realtor for bad advice. They won $42, 500.

The property disclosure form, pushed by almost all real estate boards across the country, has resulted in more than 240 lawsuits, and millions of dollars in awarded damages to buyers – even those who had detailed home inspections done, and even when problems occurred years after closing.

These things are toxic. The questions are ambiguous and answers can be wide open to legal interpretations. In many cases, vendors don’t even know what the question means or what the correct answer might be (“Are there any encroachments, registered easements or rights of way?”, “Are there any restrictive covenants?”, “Is there any galvanized metal or lead plumbing?”). The forms also ask far more than the law demands of a seller, and yet once you answer any question and your agent hands the thing over, it becomes a consequential legal document.

So why do the realtors pump property disclosure forms (along with those horrible Buyers Representation Agreements)? Simple. The industry believes any liability arising out of a real estate transaction will then be dumped squarely on the seller, not the agent. In fact if you look carefully at this form, you will see that spelled out. Realtors, in other words, are running away from their duty of care, leaving clients to fend on their own.

So what are we to conclude? Simple. Two things.

If you are a seller. Never, ever fill out one of these despicable, intrusive and potentially explosive documents. If you live in a jurisdiction in which nobody will list your home without it, just write “As is” across each page, and sign.

If you are a buyer, always insist on a fully completed property disclosure form.

Now you know why.

FORM modified

146 comments ↓

#1 Millenial on 07.27.14 at 4:14 pm

Some of those questions are ridiculous.
10. Are there any public projects planned for the neighbourhood?
16. Pending heritage restrictions?

How the hell am I suppose to know that? Do your own research!

#2 crowdedelevatorfartz on 07.27.14 at 4:16 pm

Egads!
What a nightmare. Dont think I’d be sellin a house any time soon if I had to sign one of those “disclosure” forms.
Whatever happened to caveat emptor?

#3 Retired Boomer - WI on 07.27.14 at 4:23 pm

Good advice.

I don’t know about how the rules vary between the US & Canada, but when we sold our properties in the past, there have been 5, we always told the truth about what had happened with the house during our tenure.

As to knowing things such as writes of way, or restrictive covenants, who can answer that? Just say unknown.

Wet basement, disclosed, improvements, disclosed, new siding, here is the contractor’s paperwork etc. Why hide anything? One place we lived in 8 years, wet basement once, from storm water backup – disclosed.

I’ve sold many used cars, too. All AS-IS. Nothing ‘known’ to be wrong with them, but as a driver who gets 80-90,000 miles out of his front brakes I am unusual, not the typical fool.

Anybody who lied knowingly, or inadvertently is Lawyer fodder, see you in court!

#4 Chopper on 07.27.14 at 4:23 pm

The RE cartel wants to take your money but do nothing and take no responsibility for any wrong doing.

Things are gonna change for the RE industry in Canada, people are not stupid, they read this blog.

A day of reckoning is coming and it would not be nice for the Realturds who lie and cheat.

#5 Retired Boomer - WI on 07.27.14 at 4:24 pm

Hey, where’s my dollar?

#6 Derek R on 07.27.14 at 4:26 pm

All house have problems. If you don’t want the problems don’t buy a house.

#7 Angry Mann on 07.27.14 at 4:29 pm

Hate to point out the obvious but your advice for buyers and sellers is contradictory!

Of course it is. — Garth

#8 jakethesnake on 07.27.14 at 4:34 pm

Garth, please destroy me with your wit and cutting sarcasm. I need a good laugh, because housing prices continue to sky rocket and my wife’s nagging is reaching fever pitch. Or at least let me take your Harley for a joyride.

#9 I'm stupid on 07.27.14 at 4:43 pm

If you are a seller. Never, ever fill out one of these despicable, intrusive and potentially explosive documents. If you live in a jurisdiction in which nobody will list your home without it, just write “As is” across each page, and sign.

If you are a buyer, always insist on a fully completed property disclosure form.

Nice one Garth.

#10 devore on 07.27.14 at 4:43 pm

Because of a high water table they’d always relied on the sump pump, and three years before selling had experienced a flood. The received $35,000 from the insurance company to fix the problem, and thereafter considered the issue solved. So, the realtor said, just answer that question in the negative. They did.

Surely, their REALTOR’s(tm)(r) Errors & Omissions insurance covered this gaffe, right? Liability insurance then? Bwahahaha! ah, sorry, this is totally inappropriate humor.

These seem like nuisance lawsuits, the role of this disclosure form has always been advisory, and as it is answered by the home owners, who are not engineers or inspectors, they can only answer with what they KNOW. Ie, disclosure. The buyers hired an inspector, who found nothing, and previous damage and defects were repaired and remedied by professionals.

I don’t know why judges are handing out these awards. There is no regulatory force behind these disclosures.

#11 Alex on 07.27.14 at 4:44 pm

More and more, I believe that the job of selling real estate should be made much simpler. Have the interested sellers register their property on a web site, have interested buyers register on said same website, set an auction date, and then have at it. No rules, no restrictions, take it or leave it. Hand out bandages for the aftermath, and maybe queue up the ambulances if things get really out of hand. Probably need to screen people for weapons but who doesn’t these days?

Problematic? No doubt it would be, big time, but anything would be better than the present system that seeks to perpetuate the scum-sucking swine who operate within the present system. And of course, I offer my apologies to swine everywhere. I think they come out worse off in comparing them to the people who sell real estate.

#12 Homeowner on 07.27.14 at 4:49 pm

great advise.

#13 gmc on 07.27.14 at 4:53 pm

ya I got nailed by a realtor holding back the funds of the sale of our home for close to year, they bought the back end of our 5 acres, then after closing the deal, couple days later told us we better sell them the rest or else they would island us out for a commercial development, and therefore lower our property, the other three neighbours had sold because they were also worried

#14 TurnerNation on 07.27.14 at 4:55 pm

Kanada: A land of Bilk and Dunny

#15 Herf on 07.27.14 at 4:58 pm

Garth,

Your advice makes it sound like the seller who refuses to complete the full disclosure form (other than writing “As is” on each page), needs to count on finding a (greater) fool for a buyer who doesn’t demand the fully completed disclosure form. If the buyer turns out to be more savvy and insists on the fully completed disclosure form, then it appears the buyer and seller are at a stalemate. Then what (other than the seller finding a fool for a buyer)? Seems the only way for the deal to proceed is for the seller to supply the fully completed form after having it reviewed by a competent lawyer, which sounds complicated, tedious and still risky for the seller. Seems the situation might become an opportunity for some “buyer payback” against greedy sellers. Just too bad some of that payback can’t also be off-loaded onto the buyer’s agent, who are perhaps just as deserving.

#16 crossbordershopper on 07.27.14 at 4:58 pm

#6 is correct, what are you going to do ask a girl to fill out this questionaire before you go on a date.
where does end? just like my spinster sister in law 47 still at home with her mother, no one is good enough, this can go wrong, she has done nothing with her life because she takes no chances, doesnt even drive.
life is to be lived, risked and won and lost, part of the game. you gotta buy a ticket.

#17 weedeater on 07.27.14 at 5:05 pm

The joys of owning real estate

#18 dave c on 07.27.14 at 5:07 pm

So what if the realtor doesn’t accept the “as is” writing on their document. Don’t they have the seller cornered with this document? ie. don’t fill it out and you don’t get listed on MLS?

So then what?

Just sign it, providing no information. — Garth

#19 Effluence greasy on 07.27.14 at 5:22 pm

Bob Aaron’s work bothers me. Most of his columns, taken individually, give solid advice about real estate transactions. But in pretty much every column dealing with a conflict between buyers and sellers about the condition or suitability of property, he seems to side with the sellers and advise the buyers to close the deal, not to sue, and not to complain.

The SPIS is a real burr under his saddle. He seems to think buyers aren’t entitled to any information about properties, and should just be forced to buy all properties as is and where is with no representations or warranties, much as powers of sale are marketed by the know-nothing banks selling them.

#20 Freedom First on 07.27.14 at 5:25 pm

Thanks Garth! This fits in well with your previous post “Knowledge”. As you show us daily, “The devil is in the details”. Great example today of how foolish people can be in what they are willing to sign.

Yes indeed, as I like to say, ignorance is not bliss it is very expensive. I am no longer amazed how hard people will work in their chosen Profession, Trade, Field of expertise, etc., to make their money, and yet, be so careless in the squandering of it by not doing any or little due diligence with all of their financial affairs. Now, nobody can know everything about anything, but when it comes to ones personal finances, the majority of the masses in every country are serious financially illiterate cripples. (of course, present company excluded, the seriously well-off blog dawgs).

I would like to add a personal observation I have been thinking about lately. I think there is few people who are truly “Diversified” enough. There is many assets and asset classes in the world. I do not want to make myself vulnerable in any way to what happens to any 1 asset in any 1 asset class. Whether you are capable of DIY investing, or hire a personal financial adviser to handle ALL of your financial affairs, at least find out what All of your financial affairs means.

#21 takla on 07.27.14 at 5:26 pm

don’t sign it and the prospective buyers think your hideing something/sign it and your risking potential lawsuit if a problem creaps up,on the wet coast most all properties will have some form of water damage…be carefull sellers!

#22 devore on 07.27.14 at 5:29 pm

#3 Retired Boomer – WI

As to knowing things such as writes of way, or restrictive covenants, who can answer that? Just say unknown.

You should always answer “don’t know” for all the questions where you don’t know the answer. Nearly every single one of these questions is discoverable by the buyer through due diligence. Even if you have absolute evidence assuring 100% certainly (ie, factual information), it’s a “don’t know” or “as is”. Every used durable product, be it a car, house, or refrigerator, will have wear and tear, and all manner of latent issues.

Lets look at the first question, “I have owned this property from…”. Easy right? Just fill it in. But the buyer should already know this. If you answer this question yourself, there is a possibility of a typo, or writing down the wrong date. Why open yourself up to this kind of trouble? There are already notarized legal documents with this information on them.

And it just goes downhill from there.

“Are you aware of any non-compliance…?” Hmm, “as is”. How can you ever prove a negative if your claim is questioned?

Planned projects, “unusual” taxes, heritage designation? Hey, how about the buyer get a good realtor who is an expert in his target area, and has his ear to the ground? Why would a home owner know about any of this stuff? It’d just be rumours anyway. Are you willing to put that down on a court-enforcible document?

#23 pinstripe on 07.27.14 at 5:40 pm

Indicators are that the RE salespeople are covering their butts with the disclosure form. It also will provide some buyers, who are closely linked with a RE salesperson, to use the legal power of the disclosure form to sue the seller strictly for financial gain.

Will the disclosure form protect the buyer from a house-flipper?

A better option for buying/selling real estate is to use FSBO. The important thing is that the buyer/seller must fully understand what is bought/sold. There is a lot of money involved and the buyer/seller must be fully award what they are doing. Cut out the middle man. Win/Win.

Most sales ;people do not have a good knowledge of what they are selling. That is why they are called Sales People. Their primary job is to push the product and claim their commission.

FSBOs invariably save you nothing and offer even less protection. Most DIY sellers are greedy and simply pocket the money they’d pay in commission. Why would you want to buy that way? — Garth

#24 stop lying on 07.27.14 at 5:40 pm

what happened to caveat emptor? i would never sign such a silly thing. you want it, you buy it, otherwise piss off. i’m not leaving myself open to future unwarranted litigation.

btw today i had a financial planner looking for business door to door. times must be tough for planners as well as agents :P

#25 Coho on 07.27.14 at 5:43 pm

Such ‘shocking’ lack of accountability. Well, what do we expect for the pittance we pay for a realtor’s sales commission. It’s not like we’re shelling out $15K! Oh…wait….

#26 Robbie on 07.27.14 at 5:53 pm

As Garth says, you can fill out the Property Disclosure Statement by putting a line diagonally across each page and then signing it on the last page. I see that with absentee landlords and estate sales. That said, Buyers are very leery of a PDS that is not filled out when they can be, as the immediate suspicion is there is something seriously wrong with the property and the Seller wants to keep it hidden. It’s a Buyer’s market in greater Victoria area so lack of a proper PDS will usually significantly hamper the sale of a property. A Home Inspection cannot make up for a PDS as significant defects can be concealed by a Seller.

I’m a Realtor and I would certainly advise my Buyers to be very suspicious of properties with no PDS unless there was a good reason (examples above) as to why it was not filled out.

I recommend a Seller fill out the PDS and be very frank about any problems, past or present…that is how you avoid lawsuits.

#27 east van on 07.27.14 at 5:55 pm

HOW LONG AFTER SIGNING A FORM CAN A SELLER BE SUED?

#28 };-) aka Devil's Advocate on 07.27.14 at 5:57 pm

I give up.

}:-/

#29 crowdedelevatorfartz on 07.27.14 at 6:03 pm

@#27 D.A.

I give up.
++++++++++++++++++++++++++++++++++++

Promise?

#30 eddy on 07.27.14 at 6:07 pm

#25 Robbie on 07.27.14 at 5:53 pm

As Garth says, you can fill out the Property Disclosure Statement by putting a line diagonally across each page and then signing it on the last page. I see that with absentee landlords and estate sales. That said, Buyers are very leery of a PDS that is not filled out when they can be, as the immediate suspicion is there is something seriously wrong with the property and the Seller wants to keep it hidden. It’s a Buyer’s market in greater Victoria area so lack of a proper PDS will usually significantly hamper the sale of a property. A Home Inspection cannot make up for a PDS as significant defects can be concealed by a Seller.

I’m a Realtor and I would certainly advise my Buyers to be very suspicious of properties with no PDS unless there was a good reason (examples above) as to why it was not filled out.

Typical realtor lies. Save the jive for your 90 year old vendors. Robbie, you’re insulting my intelligence, swallow my pride and apologize

#31 Kilby on 07.27.14 at 6:09 pm

We have filled out 5 of these and there are “Don’t know” and “Does not apply” options where we are in British Columbia. If you don’t know, just X the box and it is incumbent on the buyer to have it checked out to their satisfaction. Easy. I wouldn’t consider buying a place without one, another tool to help, that’s all.

#32 };-) aka Devil's Advocate on 07.27.14 at 6:14 pm

#18dave c on 07.27.14 at 5:07 pm
So what if the realtor doesn’t accept the “as is” writing on their document. Don’t they have the seller cornered with this document? ie. don’t fill it out and you don’t get listed on MLS?
So then what?
Just sign it, providing no information. — Garth

By not completing the PDS you essentially stigmatize your property. The Buyer is going to ask; “What are they trying to hide? Why won’t they complete the form? What’s the problem?” and unless it’s a hot property they may very well just move on to another.

The best policy is full disclosure.

And what of the question on the PDS that asks if “to the best of your knowledge has the property ever been used for the growing and/or manufacture of illegal drugs?” Try skirt that one with an “as is, where is” disclaimer in a court of law.

#33 FormerSaskie on 07.27.14 at 6:23 pm

FSBO is starting look good. If information about losses due to disclosure were written about in msm then more sellers would do their own selling.

Smart sales people should be skipping mandatory disclosure and setting up their own shop outside of the cartels. They are missing a business opportunity.

Sellers just need to refuse to complete the form and realtors ™ will back off because they are being hit in their bottom line.

Imagine disclosing the history on the million $ slanty shanties in TO!

#34 devore on 07.27.14 at 6:23 pm

#25 Robbie

I recommend a Seller fill out the PDS and be very frank about any problems, past or present…that is how you avoid lawsuits.

That is good advice, but can also backfire. The PDS has to be complete. Disclosing problems does not mean you are covered for problems you do not disclose. As we’re seeing with these lawsuits, the allegations are not just that the owner did not disclose what they knew, but that they SHOULD HAVE KNOWN. If my basement floods during a storm because the sump pump fails, and I hire a licensed company to repair the damage and replace the pump, why am I held accountable to have known there is still damage hiding? If I knew or suspected there was still damage, I would have gotten the guys to fix it, no? It’s a two way street.

The disclosure form is fine, if that’s all it was. But sellers are being held to a much higher standard than any lay person should be.

#35 Flawed on 07.27.14 at 7:00 pm

Speaking of septic fields…..coming to a Govt Public Pension plan – funded by taxpayers – near you:

http://armstrongeconomics.com/2014/07/26/pensions-have-always-destroyed-society-just-like-detroit/

#36 X on 07.27.14 at 7:10 pm

Another great example of the RE cartels looking out for their own interests over those that put food on their table.

#37 LH on 07.27.14 at 7:19 pm

“As is, where is” never stopped a bidding war in the hot pockets of toronto!

LH

#38 just another brick in the wall on 07.27.14 at 7:20 pm

Kanada is becoming a joke,
RENT!

#39 Catalyst on 07.27.14 at 7:28 pm

Wow the market price on shitty advice has been rising. And here I have been giving it away semi-daily for free…

#40 Dike Muffy on 07.27.14 at 7:33 pm

One more question for the list,
“House value goes up by _____ % next year”.

#41 Tony on 07.27.14 at 7:39 pm

Moral of the story is never purchase house insurance. Insurance in the long run if you own enough properties is always a total waste of money. Once the buyer sees no insurance claims because you don’t have any property insurance then it’s caveat emptor for the buyer.

#42 lawboy on 07.27.14 at 7:43 pm

“Please satisfy yourself.”

#43 dave c on 07.27.14 at 7:43 pm

Does anyone have their own form that is not as lawsuit friendly that could be used instead so that the RE agents can be given something?

#44 Robbie on 07.27.14 at 7:54 pm

#34 Devore

I think what happened with the lawsuits is that the Seller had remediated a problem and then felt there was no problem and didn’t indicate anything on the PDS What Realtors are advising where I am is to indicate there was a problem in the past with___ but it was remediated by ____. Often it is something like rodent infestation or such or perhaps a roof leak that was repaired. Flooding caused by the failure of a sump pump can be easily remediated but could still be an area of concern for a Buyer. I would want to see that not only was the sump pump replaced but some sort of alarm system was in place in case the sump pump failed and water started to rise again. That type of warning system is inexpensive and really should be part of any system where a sump pump is required to keep an area dry. Recent regulations regarding septic systems now require an alarm system in case of pump failure…beats having sewage bubble up in your lawn. ~

#45 Pablo on 07.27.14 at 7:56 pm

Garth…many lenders will not lend without one filled out, and it is a red flag to buyers. I agree though. Those things are toxic but the bank has you over a barrel, more so than the realtor.

That is incorrect information. — Garth

#46 Mike T. on 07.27.14 at 8:02 pm

‘I give up. ‘

you lasted 17 minutes

#47 Chickenlittle on 07.27.14 at 8:11 pm

Hey, Devil’s Advocate:

Is this you? http://www.greaterfool.ca/2013/01/17/brilliant/

Are you AJ Hazzi?

#48 -=jwk=- on 07.27.14 at 8:20 pm

And what of the question on the PDS that asks if “to the best of your knowledge has the property ever been used for the growing and/or manufacture of illegal drugs?” Try skirt that one with an “as is, where is” disclaimer in a court of law.
————-

“As-is” is a well known Realtor(c,tm,r) term, so it better hold up or the industry is in trouble…Buyer is free to inspect. I’m not spoon feeding you, make your own investment decisions. Full disclosure just results in more things to get sued for…

#49 omg on 07.27.14 at 8:22 pm

Garth states that there have been at least 240 law suits regarding property disclosure forms.

My understanding is that only 1 in 10 actions actually get to court – they are usually settled before court by agreement between the buyer and seller.

So figure that 240 number to be closer to 2,400 actions by buyers against sellers.

The stigma of “No disclosure Statement” on a listing is big – it gives the sense the seller is hiding something.

Better to fill out the Disclosure Statement and use a lot of “Unknown” or “Do Not Know” answers.

The question Bill and Joyce were likely faced with if the disclosure statement is anything like the ones I have seen was “Has there been any water or moisture issues with the basement”.

They answered negative when they knew that there and been – so they are liable and should pay damages. Better to have answer yes with explanation note – much more defendable.

#50 omg on 07.27.14 at 8:26 pm

#18 Dave C.

So what if the realtor doesn’t accept the “as is” writing on their document. Don’t they have the seller cornered with this document? ie. don’t fill it out and you don’t get listed on MLS?
—————-

There are a 10s of thousands of real estate agents in Canada, and 10% of them make all the money.

So there are lots of hungry agents – some really good young ones with energy and time. So if one does not accept your condition move on to the next.

Same goes for Buyer Agency agreements – there is always some agent out there hungry for the business that will go without.

#51 pinstripe on 07.27.14 at 8:29 pm

Will developers provide a PDF for new SFH and condos?

Some of the stories, presented by trades working for developers, are very unsettling and yet there is not too much negativity presented by the salesman selling those units.

Does the PDF cover things like grow ops, drug lab, rodents, insects, pets, pig-sty?

#52 omg on 07.27.14 at 8:31 pm

FSBOs invariably save you nothing and offer even less protection. Most DIY sellers are greedy and simply pocket the money they’d pay in commission. Why would you want to buy that way? — Garth

——-
Of course I will point out the obvious, that using the high paid realtor did not do much for the vender in the above cases.

FSBO are something worth exploring for those that are willing to do the footwork and spend time, not people that want to start looking for a house on Friday and make an offer by Sunday.

HE WHO WINS TURNS OVER THE MOST ROCKS

#53 Nemesis on 07.27.14 at 8:33 pm

#BoobyDupes. #LifeLessonsCourtesyOfColumbia… #Curly,Larry&Moe,EtAl.

http://youtu.be/E7TP5z1o8LI

[NoteToSaltierDogz: It just seemed to fit.]

#54 eddy on 07.27.14 at 8:37 pm

In 416, there is no ‘stigma’ to not having a PDS on a listing. Near me, at Islington and Bloor, a 50 yr old 1.5 sty, 50×125 lot listed for 749k sold for 903k last week.

#55 Kilby on 07.27.14 at 8:43 pm

Don’t know what all the fuss is about…Just tick “don’t know” ..DA is right, by refusing you will just stigmatize the property, I wouldn’t buy anything where the owner refused to tick a few simple boxes. As somebody else pointed out “Buyer beware” Do your homework, nobody is forcing anybody to buy anything, we have to take a little responsibility for our own lives instead of blaming everybody else, if buying a home is so stressful for some maybe they shouldn’t buy anything, just rent and have no responsibility for anything

#56 evan on 07.27.14 at 9:01 pm

~~~If you live in a jurisdiction in which nobody will list your home without it, just write “As is” across each page, and sign.~~~

– Can you clarify what you mean by this? You mean put ‘as is’ written beside each answer?

#57 Paul on 07.27.14 at 9:02 pm

Never fill out that form, that’s why there are home inspectors.

#58 What is up with that on 07.27.14 at 9:04 pm

The following has nothing to do with real estate…It seems there are a bunch of women online recently that are not at all sure about the whole gender politics thing. This one woman posted a few pictures showing her fiance recovering from war wounds. It kind of got to me a little bit…
http://goo.gl/eCzi36
The rest of the women can be seen here….
http://goo.gl/px4frS
It seems it might be a good opportunity for people of good will to throw in their two cents.

#59 Retired Boomer - WI on 07.27.14 at 9:04 pm

In re-reading tonights story line, it seems the sellers were not completely honest in their “property Disclosure Reports.”
They did NOT disclose past issues.

Sure, they might have just signed the PDS “as is.”

Sure, they should have stated that there HAD been issues, or an issue in the past. Now, when we get down to the minutiae of “when” it might be relatively easy to assign an approximate time based on any insurance payment, but if there never was any insurer notice, or payment….. would you be in trouble for not recalling the time frame?

Taking this stuff further, say there HAD been a water issue, approximately 3 years ago, you believe it has been mediated, and thus you so disclosed. The house sold, the buyers later allege a mold issue that you “should have known about, as you had stated their HAD been a water issue…”

1. Can you expect the realtor you ‘hired’ to sell the property to be your co-fendent here?

2. What statue of limitation governs these types of disclosures? Does it vary by locale?

3. Who, other than a potential buyer gets access to your answers?

4. Do your answers, or lack thereof, affect the ‘lendability’ towards your property?

Just think how much grief could have been avoided had you just carefully torched the place instead.

Oh wait, just thinking out loud, what do you mean that’s no longer allowed?

#60 Mister Obvious on 07.27.14 at 9:28 pm

#51 pinstripe

“Does the PDF cover things like grow ops, drug lab, rodents, insects, pets, pig-sty?”
——————————

Well… grow ops anyway. In BC at least. When I sold my house in 2010, I recall signing that it had never contained a marijuana grow-op.

Of course, I had lived there for 25 years and I was pretty certain the elderly couple who had lived there the previous 25 years didn’t have one either.

Interestingly though, a house just a block away actually was a grow op. It started on fire one night and the fire department contained it but pretty much let it burn.

As I was watching the spectacle the fire chief told me that they knew full well it was a grow op as soon as they got there. No firemen would enter the house because of the very real threat of dangerous booby traps.

Its was all just part and parcel of the Vancouver real estate scene, I guess.

#61 };-) aka Devil's Advocate on 07.27.14 at 9:29 pm

#30 eddy on 07.27.14 at 6:07 pm
#25 Robbie on 07.27.14 at 5:53 pm
As Garth says, you can fill out the Property Disclosure Statement by putting a line diagonally across each page and then signing it on the last page. I see that with absentee landlords and estate sales. That said, Buyers are very leery of a PDS that is not filled out when they can be, as the immediate suspicion is there is something seriously wrong with the property and the Seller wants to keep it hidden. It’s a Buyer’s market in greater Victoria area so lack of a proper PDS will usually significantly hamper the sale of a property. A Home Inspection cannot make up for a PDS as significant defects can be concealed by a Seller.
I’m a Realtor and I would certainly advise my Buyers to be very suspicious of properties with no PDS unless there was a good reason (examples above) as to why it was not filled out.

Typical realtor lies. Save the jive for your 90 year old vendors. Robbie, you’re insulting my intelligence, swallow my pride and apologize

Robbie is right. Of course you won’t believe me/us… until such time as you have a problem with that house you bought in the manner you suggest you would. But that’s ok… an education is, after all, a bargain at any price. Learn Eddy learn while the education is cheap.

#45 Pablo on 07.27.14 at 7:56 pm
Garth…many lenders will not lend without one filled out, and it is a red flag to buyers. I agree though. Those things are toxic but the bank has you over a barrel, more so than the realtor.
That is incorrect information. — Garth

Might want to check YOUR information on that one Garth. It surprised me when I got called by a lender asking for the PDS the first time. Not so much the second time. But think about it, for a buyer a PDS is an additional level of comfort to the Buyer. Banks hold the paper – they are buyers too.

#48 -=jwk=- on 07.27.14 at 8:20 pm
And what of the question on the PDS that asks if “to the best of your knowledge has the property ever been used for the growing and/or manufacture of illegal drugs?” Try skirt that one with an “as is, where is” disclaimer in a court of law.
————-
“As-is” is a well known Realtor(c,tm,r) term, so it better hold up or the industry is in trouble…Buyer is free to inspect. I’m not spoon feeding you, make your own investment decisions. Full disclosure just results in more things to get sued for…

Sure… if THAT’S the way YOU do business then, yes, but of course.

#62 realtors are useless scum on 07.27.14 at 9:31 pm

Not only is the RE industry useless but they are true scum. Every realtor who posts here knows they are as useful as travel agents.

#63 Temporary Foreign Prime Minister on 07.27.14 at 9:32 pm

17. Are there any dinosaur eggs buried beneath the foundation?

18. Given the increasing intensity of climate change, will the property be subject to Great Lakes flooding?

19. How many tornadoes will the property be subject to over the next 20 years?

20. Will any future neighbors, on either side of the property, ever own a Harley-Davidson with extremely loud pipes?

21. Will the Big Six banks collaborate in the future and invent new ways to collectively screw new mortgage holders?

22. Will interest rates ever rise, and by how much?

23. Should interest rates rise in the future, what will be that the devaluation of the property?

24. How long before the Internet and Competion Bureau put REALTURDS® out of business?

#64 };-) aka Devil's Advocate on 07.27.14 at 9:42 pm

You want to know the very foundation of “house porn”?

I can’t imagine putting certain, given, annual family events being placed at jeopardy by renting instead of owning.

What an AWESOME evening tonight was.. as it was last year and the year before that… AWESOME.

#65 No Debt on 07.27.14 at 9:44 pm

Sort of “catch-22” advice. Seller’s are advised to write “as-is” on any disclosure forms and yet buyers are advised to insist on a completed document of disclosure.

Should pretty much bring the real estate industry to a halt if buyers and sellers alike stand firm.

#66 John Prine on 07.27.14 at 10:00 pm

Reading all the comments tonight, Devil’s Advocate seems like the only one making any sense, lot of bitter, suspicious people out there…

#67 bricklayer on 07.27.14 at 10:13 pm

what a load of BS. I agree with not filling out a form if you are selling, but insisting on one if you are buying? this will mean one of two things: willing sellers will sign anything just to get rid of a place. or prices will come way down to price in all eventualities. this is screwed, I’m going to the bar.

#68 Cici on 07.27.14 at 10:16 pm

#3 Retired Boomer – WI

I’m with you…be upfront, don’t lie. Put’s both the buyer and the seller in safer position.

#69 Mackers on 07.27.14 at 10:19 pm

Proves Vancouver Real Estate will never go down. Get over it

http://www.theprovince.com/news/vancouver/Vancouver+tower+makes+enemies+before+built+some+complain/10067128/story.html

#70 Robbie on 07.27.14 at 10:20 pm

Property Disclosure Statement (PDS) is required in the jurisdictions I am familiar with. However, as has been stated, you can just cross out the pages, initial and sign and then you have fulfilled the legal requirement of completing the PDS.

#71 Willy H on 07.27.14 at 10:22 pm

I believe that title insurance (available in Canada from several insurance firms) covers about half the items shown on part of the disclosure questionnaire above. Sadly, realtors are pretty much useless faux-professionals these days.

You can never be sure that they are acting purely as your agent. You can never be sure they have performed their due diligence investigating title, liens and searches as your purchase agent. Isn’t this what they are being paid for? Instead they spend 75% of their time marketing your home and having you move furniture and remove pictures and paintings to make your home appear to be something it isn’t!

Furthermore, you should never use a home inspector recommended by your agent when buying a home regardless of who is listing the home. Of course home inspections are pretty much useless as well unless you have someone very qualified doing the inspection. The waiver form you sign relieves the home inspection firm of any responsibility for shortcomings in the final report. A complete sham from the get go.

No wonder so many are turning to lower commission options when selling their homes when they can’t see the value in a realtor. Buyers should never sign these despicable disclosure documents. Sellers should do themselves a favour and find a good independent home inspector (if you don’t no what to look for) with no vested interest in the transaction even if it costs you extra.

#72 OttawaMike on 07.27.14 at 10:34 pm

February 1998, I purchased an estate home on a 2 acre country lot from a divorcing RCMP officer.

It was after the devastating ice storm and nobody was buying anything. I went in with a generous offer and the realtor convinced me to use a lawyer that she had close ties to. This turned out to be a financially fatal mistake.

The snow melted and approaching the spring closing, I visited the property and noted that the septic field was spongy and very green at that location. I mentioned this to the red coat and he replied it was always like that in springtime. He also went on about liability of me on his property and asked that I stay away until deal closing.

I mentioned the situation to the realtor friendly lawyer, who also happened to live nearby, and even went as far as asking for documentation to the fact prior to closing. Lawyer replied that a verbal note was enough and he would act on my behalf should any problems occur after closing. House inspector excluded the septic since he couldn’t access it in winter.

Within 6 weeks of moving into the house, our family of 5 opposed to the previous household of 2, caused the septic system to totally fail to the tune of $13,000. Lawyer man(can I name him here?) wouldn’t return my calls and when he finally did he had no recollection of the conversation and advised that I just repair the failure at my expense and move on. Selling realtor told me to call the listing agent and “good luck with your problem”. When I pulled out the disclosure form, the Mountie had checked that the septic had a problem then scribbled it out to say no there was no problem. Dudley Doo Right was nowhere to be found, he had no forwarding addy or phone due to “job privacy issues”.

Every septic contractor I called for quotes knew the property since the horseman had called them all for pricing. In the end I chose to not pursue the stress of litigation and ate up the tremendous cost as I had 3 kids all under 8 to look after.

Could I have gotten a payout? Yes but only with more upfront legal costs and heartache. Funny thing is every time I run into the lawyer guy and I run into him frequently, he looks down at his shoes. I have probably lost him more business, than that realtor lady ever threw him, telling my woeful tale of his incompetence to anybody who would listen.

#73 Entrepreneur on 07.27.14 at 10:44 pm

The above article suggest that sellers have a choice to sign or not but if ever sold on Vancouver Island the realtors don’t offer that choice. The realtor mentions about a new form to fill out and to be as honest as possible or else the buyer can come back and sue. If don’t know, put that down, but never “as is.”

The realtors know that they have sellers and buyers by the short rope and use that to do whatever they want to.

As sellers, we signed the PDS, answered as honest as possible but often wondered if it was safe from dishonest people. Would we do it again? Probably but with “as is” so the ball can fall on either side.

#35 Flawed…”septic field…Govt Public Pension Plan…funded by taxpayers…” So true but I think England cut pensions away from public pension some years ago. Canada knows, at least, I hope they know.

#74 devore on 07.27.14 at 10:52 pm

#44 Robbie

I think what happened with the lawsuits is that the Seller had remediated a problem and then felt there was no problem and didn’t indicate anything on the PDS What Realtors are advising where I am is to indicate there was a problem in the past

No, see, that’s the problem. I have no issue with disclosure at all, it is that the questions are vague, they are asked of home owners, who are not experts or professionals, and they are being held financially accountable for omissions, even when they are not intentional.

The question was “is there water damage”, not “WAS there water damage in the past that was repaired”. There WAS, and it WAS repaired, to the owner’s knowledge, so they said truthfully, no there is no water damage.

Again, disclosure, fine. Unlimited liability? No. Judges seem to be happy to rule in buyer’s favor in these cases, where does this kind of reasoning stop?

When you are buying a used house, you are buying a product with decades of use, misuse, repairs, renovations, and who knows what else. You want a warranty? Buy a new house.

#75 };-) aka Devil's Advocate on 07.27.14 at 10:52 pm

No wonder so many are turning to lower commission options when selling their homes when they can’t see the value in a realtor. Buyers should never sign these despicable disclosure documents. Sellers should do themselves a favour and find a good independent home inspector (if you don’t know what to look for) with no vested interest in the transaction even if it costs you extra.

Henry Ford was once on trial for something or another. The prosecution called Ford an “ignorant uneducated idiot” to which Mr. Ford informed the prosecution that, with the mere push of a button, he could summon an expert on any given subject to provide him with whatever information he needed. Now ask yourself; “What is stupid and what is smart?”

Many could benefit by expert advice if only they would seek it. Why pay the price of experience when the cost of that employing another who specializes in such things can be so much less? REALTORS® can be a valuable resource before, during and long, long after the transaction at hand is completed.

Do your due diligence people.

#76 };-) aka Devil's Advocate on 07.27.14 at 10:54 pm

and THAT is the difference between full service and discount service.

#77 Sydneysider on 07.27.14 at 10:55 pm

#25 Robbie

“I’m a realtor”

Shouldn’t that be “I’m a Realtor (TM)”?

#78 Effluence greasy on 07.27.14 at 11:05 pm

sell – verb
1. give or hand over (something) in exchange for money.
2. persuade someone of the merits of.

With or without an agent, when trying to sell your house (or car, or…), you’re trying to accomplish BOTH of the above definitions. Sure, you can say “satisfy yourself” as the answer to every question a buyer asks. If you’ve got superficially desirable product in a hot market, or find a dumb enough buyer, it might even work. Personally, I wouldn’t use that strategy unless I absolutely had to.

#79 45north on 07.27.14 at 11:06 pm

“Are there any water or moisture issues with the basement,”

the form is begging for a “no” answer that can later be challenged.

the alternative is more verbiage: the laundry tubs once overflowed, the pump that pumps out the condensed water on the air conditioner once mal-functioned. In 30 years it has never rained so hard that there was water in the basement. Note the down spouts were reasonable well maintained.

come to think of it maybe I could help fill out the forms. Sounds like a better retirement project that repo man.

what is up with that : This one woman posted a few pictures showing her fiancé recovering from war wounds.

the woman shows more courage than I have ever had

#80 Shawn on 07.27.14 at 11:10 pm

Property Disclosure.

Hmmm no wonder I prefer investing in stocks.

I have bought three houses in my life and sold two.

So I own one.

I am not eager to get into buying a house or selling one.

Perhaps everything over 50 years old can be considered a tear-down. Just as well to start over.

#81 connie on 07.27.14 at 11:17 pm

My friend got sued after selling a multi family house for noise. Never listed as soundproof the tenants were quiet and there was never any noise or trouble but new owners are claiming damages for noise a year after and why they changed tenants………Imagine that !!!

#82 Hawk on 07.27.14 at 11:37 pm

I must respectfully disagree. The fault is with no one, except the law courts and the government.

Society has gone insane with “expectations” and its way way past time to return to the old Caveat Emptor principle of the buyer shouldering risk for their own purchases. They are adults and not little children.

All these things illustrate is that people want others to shoulder the risks they should shoulder and there is no moral basis for it.

#83 Son of Ponzi on 07.27.14 at 11:49 pm

#11 Alex on 07.27.14 at 4:44 pm
More and more, I believe that the job of selling real estate should be made much simpler. Have the interested sellers register their property on a web site, have interested buyers register on said same website, set an auction date, and then have at it. No rules, no restrictions, take it or leave it. Hand out bandages for the aftermath, and maybe queue up the ambulances if things get really out of hand. Probably need to screen people for weapons but who doesn’t these days?
————–
Great idea for a Realty Show on HGTV.

#84 nonplused on 07.27.14 at 11:52 pm

Well the water table example is an interesting one and I am not so sure it is clear cut. The seller probably should have said “high water table” in response to the question. On the other hand the buyer’s home inspector probably should have wondered what the sump pump was for. And the new owner probably should have ensured the sump pump was in good working order given that somebody felt the need to install it. Plenty of blame to go around.

My experience is that if you have any sort of pump, you need to make sure it’s working good and also you should have a moisture alarm, which you can get a simple one at Canadian tire for $30 and just fit it to your floor drain. If you have a septic system with a pump you need a high water alarm in good working order.

I lived in a house once (renting) that had a septic pump that failed right at Christmas time. What a mess! I caught it before it flooded the house, but the quotes I was getting to pump the tank were upwards of $2000! This is something that normally runs around $300. I finally found an oil service company that had emergency services that would do it for an hourly emergency rate and it came to $650. My landlord was actually pretty grateful I shopped around (he was out of town), but he still had to arrange to have the pump replace before the tank filled back up. I didn’t see the bill on that one.

I have a gravity drained system now but I still installed a moisture alarm. For the $30 bucks, everyone should have one unless you are strictly above grade.

I still got screwed by the Poly-E plumbing though, I would have like to reclaim money to replace it but it is probably not much more to fix than the 1% hurdle we put in the home inspection. Access to the plumbing is pretty easy through ceiling tiles. But still, it probably needs to be replaced. So folks if your buying a house built in the late 90’s, make sure it doesn’t have Poly-E plumbing. If the runs are in the walls and stuff it isn’t cheap to replace.

#85 Andrew Woburn on 07.27.14 at 11:58 pm

We sold a falling down 1960’s piece of crap on a great lot in West Van. We signed “As is” on every page of the disclosure form. We wanted to put “Selling land only” but our agent said the buyer would not get a mortgage if we did that.

We were told the buyer was planning to tear the property down and redevelop and that the process would commence as soon as the deal closed. Nevertheless, three days after closing, the buyer’s agent came screaming around claiming undisclosed damage to the rear windows. The place was clearly a total wreck on the point of falling down the hill so he was obviously just trying to renegotiate the price. We said, what part of “as is” don’t you understand and he went away. One month later the house was gone.

God help us if we had actually attempted to answer the disclosure form.

to people who planned to tear e

#86 Tedfiftyfour on 07.28.14 at 12:13 am

WilliwH
I think you have this arse about face.
Buyers should not sign these despicable disclosure documents. Sellers should do themselves a favour and find a good independent home inspector (if you don’t no what to look for) with no vested interest in the transaction even if it costs you extra.

#87 Tedfiftyfour on 07.28.14 at 12:21 am

If sellers were honest and not hide problems there would not be a need for the disclosure doc.
It should be a lawful requirement for all properties to have a disclosure document completed by an Independant professional that is an audit on the property for mold, environmental, heat loss, electrical. This would clean up a lot of concerns and ensure buyers are getting safe and efficient homes. The property can only go on the market once this audit is prepared and available and becomes a matter of public record.

#88 Son of Ponzi on 07.28.14 at 12:29 am

#69 Mackers on 07.27.14 at 10:19 pm
Proves Vancouver Real Estate will never go down. Get over it

http://www.theprovince.com/news/vancouver/Vancouver+tower+makes+enemies+before+built+some+complain/10067128/story.html
—————-
Looks like the Tower of Babel to me.
And we know how that one ended.

#89 Andrew Woburn on 07.28.14 at 12:30 am

China Hides Treasury Buys in Belgium:

http://www.bloomberg.com/news/2014-07-27/china-hides-treasury-buys-in-belgium-chart-of-the-day.html?utm_source=The+Sinocism+China+Newsletter&utm_campaign=18a01fe30e-Sinocism07_28_14&utm_medium=email&utm_term=0_171f237867-18a01fe30e-29628021&mc_cid=18a01fe30e&mc_eid=5038a6b4c4

#90 Jane24 on 07.28.14 at 12:55 am

Such docs have been required in England for years but they are sent to you by your lawyer and they go back to the lawyer for review before being sent on to the other side.

Still confusing though as I never know if the questions on changes to the house refer to those you have made yourself or those done in the history of the house. It causes grief as all changes such as new windows or wall moving are expected to be accompanied by council documents that they were done according to building code and if a previous owner did them even 30 years ago then you have nothing to send in to your lawyer.

Only way out is to pay for a new insurance policy that travels with the house guaranteeing that all work by previous owners was done right, which lets you off the hook. Naturally as the current owner without the documents who is trying to sell, this is your bill.

#91 West Coast on 07.28.14 at 1:23 am

http://www.cgedd.developpement-durable.gouv.fr/IMG/pdf/france-house-price-2012_cle01f5a6.pdf

Home Prices in France Over the Long Run
Jacques Friggit, CGEDD, French Ministry in charge of
Housing. Presentation, June, 2012.

Slightly off today’s topic, but lots of interesting charts, graphs etc…..we are not alone! Check out p. 65 for ‘How can we explain the 2000-2010 price rise?’

#92 Turtle on 07.28.14 at 2:03 am

If I ever go to sell the house I would sign “as is”. It is hard to imagine that many years after deal is done someone will call and take me to the court. Do I need to live in fear?

It is all about risks. Yes, owning the house is risky. Market can collapse… issues… problems… I got it. Do I need to add more risks to it with the possibility of lawsuit for the house I sold in a past?

Lets say I put my house on sale without PDS (“as is”) and 99 guys on my street did it with full disclosure. What chance do I have to sell the house? I think I still have a chance if I drop a price a bit, and more, and more… If someone wants to know “why?”… because I want to sleep in peace. And if it comes with the price – I will pay it.

Drop the price and buyers will come.

#93 mark on 07.28.14 at 5:52 am

There you go Garth, Canada’s bad ideas are headed for Australia!

http://www.businessinsider.com.au/nick-xenophon-wants-the-rules-changed-so-young-home-buyers-can-use-retirement-savings-2014-7

http://nickxenophon.com.au/media/releases/show/home-affordability-a-super-idea/?Stage=stage

#94 saskatoon on 07.28.14 at 7:21 am

agg?!!!

#95 Steve French on 07.28.14 at 7:49 am

Smoking Man was getting hammered last night.

Is he ok? He hasn’t posted yet today.

Smoking Man where are you?

….. Save the Smoking Man!!!!

#96 Italians Love Real Estate on 07.28.14 at 9:11 am

Lots of discussion today about failing septic tanks.

A possible band aid solution, temporary in nature would be to instruct your family to limit the amount of dietary fibre intake

#97 OMG on 07.28.14 at 9:13 am

Smoking Man finally discovered, we have the photo proof above. We all though we was getting hammed at Senica with his conscious consolidator. I’m not sure if he can be saved, saved from who, himself?

#98 };-) aka Devil's Advocate on 07.28.14 at 9:27 am

#77 Sydneysider on 07.27.14 at 10:55 pm
#25 Robbie
“I’m a realtor”
Shouldn’t that be “I’m a Realtor (TM)”?

Actually the registered trademark is all capitals –

REALTOR®

#99 Smoking Man on 07.28.14 at 9:27 am

#95 Steve French on 07.28.14 at 7:49 am….. Save the Smoking Man!!!!

Pretty serious bender, definitely did some damage to my body this weekend..

Now this should be considered an entry into the Dudeisum hall if fame..

Playing high stakes Mississippi stud all weekend, way to loaded.

All while wearing two different flip flops all weekend, dident notice till I got home and took the boat out storm chasing…

Considering a major life style change…

To old for this shit now…

#100 Ret on 07.28.14 at 9:53 am

I don’t see how I could warrant anything in a house built in 1945. Did the country even have a national building code then? Who knows what previous owners did to the place?

When the place is sold and closes, that is the end of the story.

#101 UVZ on 07.28.14 at 9:53 am

#91 West Coast on 07.28.14 at 1:23 am

Awesome link. Thank you.

#102 Daisy Mae on 07.28.14 at 9:58 am

“If you are a seller. Never, ever fill out one of these despicable, intrusive and potentially explosive documents. If you live in a jurisdiction in which nobody will list your home without it, just write “As is” across each page, and sign.

If you are a buyer, always insist on a fully completed property disclosure form.”

*****************

Isn’t this contradictory? On the one hand, seller is advised to refuse….and ‘as is’ would raise suspicion.

On the other hand, buyer is to insist.

Damned if you do, damned if you don’t?

Obviously the property disclosure document puts all of the cards in the buyer’s hands, which is why a seller should demure. — Garth

#103 Willy H on 07.28.14 at 10:07 am

Thanks Tedfiftyfour – I did manage to post the final paragraph ass-backwards -LOL. That’s what happens with late night posts! Here is what I mean’t to say:

No wonder so many are turning to lower commission options when selling their homes when they can’t see the value in a realtor. Sellers should never sign these “despicable” disclosure documents. Buyers should do themselves a favour and find a good independent home inspector (if you don’t no what to look for) with no vested interest in the transaction even if it costs you extra.

*apparently you should never use a home inspector or lawyer recommended by your realtor (as per OttawaMike post above) – find your own so you can be assured that they independently represent your interests not the cartels!

#104 Garth is wrong on 07.28.14 at 10:38 am

From http://www.ctvnews.ca/business/what-cooling-housing-market-high-end-homes-still-in-hot-demand-1.1903488 :

OTTAWA — Canada’s housing market may be cooling, but there’s no loss of appetite for high-end real estate, according to Sotheby’s International Realty Canada.

Wow. A real estate marketing company pumping the real estate market. I’m shaken. — Garth

#105 Mark on 07.28.14 at 10:50 am

FSBO certainly worked for me. There is no way I would have kept more money had I used an agent. The work involved was minimal, keep the house clean, painted in neutral colors and decently furnished. We showed it 5 times in one week and sold it by Day 8.

Garth needs to stop protecting grossly overpaid agents. The only time I would even consider using one is if and when they move to an al la carte fee structure, but 5% of 500k, well the buyer and I can split the 25k reward and everyone is happy.

Thanks for proving FSBOs save buyers nothing. — Garth

#106 Son of Ponzi on 07.28.14 at 11:05 am

Further to the Tower of Babel coming to Vancouver:

“the South China Morning Post noted the building will have an “asset management” program for absentee owners, with staff periodically turning on taps and appliances and flushing the toilets in unoccupied units.”
——————–
well, at least they are now admitting who will be buying these units.

Who cares? If this tower were in Toronto the demographics and nationalities of the buyers would be a non-event. — Garth

#107 TSL on 07.28.14 at 11:06 am

If you own a property you own and are liable for its entire history.

It has been that way since the Code of Hammurabi. That is who it is taught in law school. The person who owned it recently is in the best position to describe the property accurately for those things that cannot be patently seen, and that includes the history of the property.

Failure to accurately disclose latent history or potential defects is ALWAYS grounds for liability on the seller. The Supreme Court of Canada weighed in on this and found it so.

#108 eddy on 07.28.14 at 11:09 am

‘Garth needs to stop protecting grossly overpaid agents.’


‘market value’ is your best offer minus 5%, after reasonable time on the market, with good exposure(MLS)
ie future assessors don’t use your sale price minus 5%,
they just use your sale price
so the agents 5% is included in your market value,
this was never your money.
in other words all house values are inflated by 5%

negotiated commission is a kind of profit sharing

if the market really tanks, it’ll be back to 6%

#109 Dupcheck on 07.28.14 at 11:12 am

We should have a confusing real estate signs version just like this one:

http://www.autonet.ca/en/2014/07/28/confusing-traffic-signs

#110 rosie "moving forward" in the knowledge that, "this won't end well" on 07.28.14 at 11:18 am

Like their grandparents who went through the depression.

http://www.denverpost.com/smart/ci_26218034/millenials-leery-mortgages-even-those-who-shouldnt-be

#111 eddy on 07.28.14 at 11:20 am

The comment ‘I wouldn’t buy a house without a PDS’
is for typists who have no intention of buying a house. Everyone knows the three most important things are location, followed by dozens of other important things (style, finishing, floor plans, gross floor area, list price, etc), where do you think PDS fits in on the list? that’s right, the bottom

#112 Randis on 07.28.14 at 11:21 am

Garth says:

“If you are a seller. Never, ever fill out one of these despicable, intrusive and potentially explosive documents. If you live in a jurisdiction in which nobody will list your home without it, just write “As is” across each page, and sign.

If you are a buyer, always insist on a fully completed property disclosure form.”

I just want to see that epic battle between 2 of Garth’s blog reader (buyer and seller) over a completed property disclosure form lol

Gotta wonder, who would win at the end? Seller who refuses to sign or buyer who insist one?

#113 Effluence greasy on 07.28.14 at 11:24 am

Thanks for proving FSBOs save buyers nothing. — Garth

The poster proved nothing of the sort. Given typical commissions, you can net two percent or more extra selling AND the buyer can save two percent or more, if extra hungry mouths to feed are cut out of the transaction.

And apropos of today’s post, wouldn’t you rather look a seller in the eye and ask him about his septic field or basement than read a form or ask your agent and his agent to play broken telephone to get the information you want from the buyer, even if you ended up paying full market price for a FSBO?

And WHAT’S with people here saying sellers are laymen and shouldn’t be expected to know the answers to questions about flood repairs or rights-of-way and covenants on title? Who would know better? Are there really people who own property worth hundreds of thousands and don’t have a copy of the title deed in their files? Wait… Don’t answer that. I continually underestimate the fraction of idiots in the population, but I am always revising my estimates.

Buying from an MLS-listed property in no way prevents a buyer from meeting a seller and having all questions answered directly. In fact, you probably should never buy a house without the seller walking you through it prior to closing. As for saving buyers money, FSBOs decidedly do not. People list privately for one reason only – to put the commission in their own pocket. They do not pass a dollar on to the buyer. — Garth

#114 randman on 07.28.14 at 11:28 am

More Karl Denninger housing wisdom….

It was all fraud — and in fact had been for the last 30 years in one form or another.

That’s the dirty secret.

How does housing go up in “value” without median family income also rising? It cannot, except through two mechanisms — ever-falling rates and fraud.

That is, loans that are not really loans — they’re speculative leverage vehicles where the only rational expectation for ability to pay is the ever-decreasing rate of interest and/or ever-looser standards for said loans, so you can roll it over into a new loan with a higher alleged “value” for your house.

What is a 2/28 or 3/27 other than this? There was never an expectation that the alleged “borrower” could pay at the 28 or 27 rate. The 2 (or 3) rate was “affordable”, but this was nothing more than a gambling vehicle, with the gamble being that you could come back and refinance before the 2 or 3 year period expired.

The “benefit” to such a gamble is that each such refinance generates more closing fees and costs, stealing money from you and putting it in the banksters pockets. The problem with such a gamble is that first it effectively extends forever the time in which you have an essential zero in equity in your home (in other words you’re renting it for the price of the monthly payment) and the roll-over risk is yours; if you cannot roll the loan at an acceptable price when the time comes since you can’t afford the fully-amortized payment you lose the house and have nothing.

Incidentally, that same scheme was a huge part of the reason The Depression was so damaging — the exact same game was played with balloon mortgages in the 1920s and Fannie Mae was created as a specific response to it. Unfortunately like nearly all government “intervention” that simply substituted one fraud for another and vectored the benefit of same toward a politically-favored few while shrouding the scam in a legal protection racket.

At the core the entire housing market over the last 30 years has been a gigantic leverage machine, predicated on the fact that everyone buys a payment, not a house. That in turn means that the secular, 30 year trend toward lower rates as shown here has created a false belief of home price “appreciation” that has become ingrained into the national psyche

#115 rosie "moving forward" in the knowledge that, "this won't end well" on 07.28.14 at 11:36 am

1968 properties over $3.6 million and rising. Did I just hear a pop.

http://www.standard.co.uk/news/uk/house-prices-fall-in-parts-of-london-for-first-time-in-two-years-report-says-9629220.html

#116 Kilby on 07.28.14 at 11:46 am

105 Mark on 07.28.14 at 10:50 am
FSBO certainly worked for me. There is no way I would have kept more money had I used an agent. The work involved was minimal, keep the house clean, painted in neutral colors and decently furnished. We showed it 5 times in one week and sold it by Day 8.

Garth needs to stop protecting grossly overpaid agents. The only time I would even consider using one is if and when they move to an al la carte fee structure, but 5% of 500k, well the buyer and I can split the 25k reward and everyone is happy.

Thanks for proving FSBOs save buyers nothing. — Garth
—————————————————————–
Lots of FSBO’s houses are usually unrealistically priced and sit on the market for many months before they are listed with a real estate company or are withdrawn. Same goes for the 1%, 2% and 3% listing companies. Garth is absolutely correct in stating that there is zero benefit for buyers except more work. We have bought and sold ourselves and it can work if you have a great home that is realistically priced…Most are not.

#117 Financial Freedom at 40 on 07.28.14 at 11:52 am

We were in the final hours of closing our house sale a couple of years ago when the buyer’s lawyer suddenly passed over a long legal document he had drafted – the themes I recall were basically guaranteeing that everything and anything about our house and property was in perfect A++ condition, and we waranteed that it would remain so in perpetuity, or it was on us (or our heirs) to fix/we would be liable for any negative outcome, or words to that effect. It was so broad, and completely unreasonable (I supposed unless you are an experienced builder signed up to TARION on a brand new build?) Our agent had never seen anything like it. We were initially shocked, then got a little upset about being blindsided at the 11th hour, signed nothing, and the sale went through regardless. Would love to have that real estate lawyer on my side, a future resale house purchase would be completely risk-free.

Another cautionary note to take your time, read every document and take everything to an experienced real estate lawyer before you sign. Our agents over the last few years have known little of substance – they are adept at working the phone. When things are rushed, and people ill-informed, only the litigators make money.

#118 -=jwk=- on 07.28.14 at 11:58 am

@ DA #64
You want to know the very foundation of “house porn”?

I can’t imagine putting certain, given, annual family events being placed at jeopardy by renting instead of owning.

What an AWESOME evening tonight was.. as it was last year and the year before that… AWESOME.
—————

I’m confused, we’ve been renting for going on 3 years now. We could not afford the 800,000 house we rent for $1500 (it was only worth about 600 when we moved in..) We have our annual BBQ weekend after the long weekend – next weekend!

Why would the party be in jeopardy? People come to see us and the kids, not the house.

Or are you saying if *you* rented, your family would refuse to visit you? I feel sad for you then.

#119 rosie "moving forward" in the knowledge that, "this won't end well" on 07.28.14 at 12:12 pm

Tal says his mind is boggled. Could this be the beginning of a trend in transparency or are the banks getting antsy?

http://www.bloomberg.com/news/2014-07-28/opaque-condo-buyer-data-prompts-cmhc-investor-report.html

#120 Son of Ponzi on 07.28.14 at 1:06 pm

Talking about disclosure:
Depreciation reports are now required for Statas in BC since Dec. 2013. (unless council opts out).
Anyone have any insight if it impacted the market?

#121 None on 07.28.14 at 1:12 pm

Hey DA – what do you think of the property disclosure form?

#122 None on 07.28.14 at 1:19 pm

#26 Robbie on 07.27.14 at 5:53 pm
I recommend a Seller fill out the PDS and be very frank about any problems, past or present…that is how you avoid lawsuits.

======

So then if the buyers go after the sellers for anything you’re willing to cover any costs that might occur for your former clients? These forms look like it is very very easy to say something and have it be interpreted any number of ways, opening you up to the courts.

#123 None on 07.28.14 at 1:26 pm

Thanks to forms like the Property Disclosure and the BRA agents are making sure of one thing – they always get paid and are not liable for anything. Great way to change perceptions of realtors! I think realtors provide useful information about areas, comparables, etc. but that’s really all they do. In light of these two agreements they support, they devolving their business model into a $500 a house sale concept. Why would you pay someone on average of 20k (10k per realtor) for a service that no matter what the realtor get paid but does not seem to have to stand by their services? It is more of a situation where you ask a lawyer for advice, pay for a few hours of his/her time and that’s that.

#124 Robbie on 07.28.14 at 1:32 pm

FSBO…? I have seen a number of FSBO properties, many going FSBO after unsuccessfully being listed by a Realtor. With one exception, all of the FSBO listings I have seen were priced the same as the last MLS price or, in one case, higher. I have also compared the information given in the FSBO listings to the original MLS listing information and found some of the FSBO listings contained inaccurate information….e.g. rounding the MLS information of “1430 sq. ft.” to “1500 sq. ft.”
I agree with Garth that you rarely save by buying through a FSBO…doesn’t seem to make sense but that is what I have seen. Perhaps it is different in other jurisdictions as my area is a southern Gulf Island, so a rather limited market.

#125 fixie guy on 07.28.14 at 1:36 pm

Good lord. Answer every open question “don’t know” if you really don’t and move on. Scratch the options out and write in “don’t know” for yes/no questions. Let the buyer decide if they want to shift over for the other 20 dopes waiting in line before being priced out forever.

#126 Incubus on 07.28.14 at 2:14 pm

In Québec

Pascal Comeau, lawyer

According to article 1726 of the Quebec Civil Code, a seller must guarantee to the buyer that the item being sold is free from hidden defects. This is known as a “warranty of quality.” Article 1733 of the Quebec Civil Code, however, allows an exception to be made where “a seller who is not a professional seller,” may waive liability when the buyer “buys property at his or her own risk.”

Many sellers think they can take advantage of this exception by adding the words “sold without legal warranty” to the bill of sale. However, a recent judgment by the Superior Court (Sultan v. Gitman, JE 2009-1951) accepted a buyer’s claim against a seller for hidden defects, even though the contract contained the words “without warranty against hidden defects.”

The court determined that for a waiver of liability to be valid, the statement that the buyer is buying the goods “at his or her own risk and peril” must appear explicitly in writing in the bill of sale. If it does not, exclusion from liability cannot be claimed against the buyer.

If you wish to sell something without being held liable for hidden defects, you must write that the item is “sold at the buyer’s own risk and peril, without warranty against hidden defects” and not merely that “this sale is made without legal warranty.”

http://www.pfdavocats.com/en/law-column-Without-legal-warranty-580

#127 Mike on 07.28.14 at 2:20 pm

CMHC getting concerned about who owns all the condos? :)
Seems like we might get some details in early August.

http://www.bloomberg.com/news/2014-07-28/opaque-condo-buyer-data-prompts-cmhc-investor-report.html

#128 triplenet on 07.28.14 at 2:33 pm

With regard to the main issue of today’s subject I would suggest it may not be the real estate boards per se, but provincial regulation(s) that govern and dictate certain requirements dealing with contracts that involve real property.
Provinces such as BC have provincial regulatory agencies that provide realtors with contract language and other documentation or forms.
Full disclosure and understanding patent and latent defects is a learning curve for most property sellers. The courts are actually quite informed about these legal principles.
Privacy issues will be next.

#129 Shawn on 07.28.14 at 2:44 pm

Needed – Residential Property Management Company for Homeowners?

Regarding the disclosure form. Ideally every seller would have a history showing the house was properly maintained and showing past repairs.

One way to accomplish that would be to outsource the management of the house and its systems to a property management company. They would do periodic inspections and do ALL maintenance on a schedule. Perhaps the banks and CMHC should be insisting on this. Property insurance company should want this done as well.

There must be a great many suburban families with neither the skills, the time or the interest in doing that maintenance.

I imagine such property management companies exist, but I basically never hear of them.

Is there even a good software product that helps to track these things? (Smokie, could build one?)

Thoughts?

#130 Son of Ponzi on 07.28.14 at 2:59 pm

#112

Gotta wonder, who would win at the end? Seller who refuses to sign or buyer who insist one?
——————–
Easy.
When prices are going up sellers win.
When prices are going down ……………….

#131 Mark on 07.28.14 at 3:06 pm

Thanks for proving FSBOs save buyers nothing. — Garth

What?

Garth we split the commission, the buyer saved at least 12.5k, maybe more. I want more with an agent then without, what don’t you understand?

#132 Incubus on 07.28.14 at 3:11 pm

If you wish to sell something without being held liable for hidden defects, you must write that the item is “sold at the buyer’s own risk and peril, without warranty against hidden defects” and not merely that “this sale is made without legal warranty.”

The judgment :

http://citoyens.soquij.qc.ca/php/decision.php?ID=994659751F222AF0D9B4F3ADD0875165&page=1

#133 Mark on 07.28.14 at 3:17 pm

Let me clarify, perhaps I’m the only FSBO who priced their home 5-10k below comparables listed on MLS, so right away, lots of calls and viewings and a sale at 99% of asking price.

#134 Mark on 07.28.14 at 3:33 pm

“At the core the entire housing market over the last 30 years has been a gigantic leverage machine, predicated on the fact that everyone buys a payment, not a house. That in turn means that the secular, 30 year trend toward lower rates as shown here has created a false belief of home price “appreciation” that has become ingrained into the national psyche”

Bingo! Very well put. Now, let’s go find some inversely correlated assets to buy and get rich as this scam of continually lowering interest rates and artificially rising equity falls apart.

Just look at what hasn’t gone up over the last 30 years due to the falling rates (gold, gold miners, for instance!).

#135 UVZ on 07.28.14 at 3:33 pm

#119 rosie “moving forward” in the knowledge that, “this won’t end well” on 07.28.14 at 12:12 pm

Is this a joke or a bad movie? CMHC is conducting surveys to understand the reason behind price gains!!?

Cancel the CMHC tomorrow and also the reinsurance of private mortgage insurers of ‘only’ 90%.

Then watch the price gains.

#136 Bottoms_Up on 07.28.14 at 3:38 pm

#9 I’m stupid on 07.27.14 at 4:43 pm
————————————–
Exactly, as a buyer you want to see one, and as a seller you don’t want to fill one out, for the exact same reason: it is a legally-binding document.

#137 Bottoms_Up on 07.28.14 at 3:41 pm

#105 Mark on 07.28.14 at 10:50 am
————————————–
If you had 5 showings in 1 week and sold it for 500k, how do you know an agent couldn’t have got you 530k?

That would have been $3500 more in your pocket (possibly more due to wider marketing), and less work on your part.

#138 Bottoms_Up on 07.28.14 at 3:49 pm

#72 OttawaMike on 07.27.14 at 10:34 pm
——————————————
Too bad that happened, you got screwed, but likely made the right decision for your family. Funny what people will say (or withhold) to make a deal.

We looked at many houses in chelsea area over the course of a couple years…do you think just one agent would mention the water problems there? NOPE (and we spoke with just about all of them)! The municipality is now getting a water treatment system, but supposedly the schools have been flushing their toilets with buckets of water, and kids have to bring bottles in every day.

http://www.cbc.ca/news/canada/ottawa/chelsea-que-residents-want-water-treatment-plant-approved-1.2699126

#139 :):(Ying Yang on 07.28.14 at 3:49 pm

#99 Smoking Man on 07.28.14 at 9:27 am
#95 Steve French on 07.28.14 at 7:49 am….. Save the Smoking Man!!!!
Pretty serious bender, definitely did some damage to my body this weekend..
Now this should be considered an entry into the Dudeisum hall if fame..
Playing high stakes Mississippi stud all weekend, way to loaded.
All while wearing two different flip flops all weekend, dident notice till I got home and took the boat out storm chasing…
Considering a major life style change…
To old for this shit now…
………………………………………………………………………

Smoking Man played this once in Biloxi at a Casino, Remember that this isn’t a game like blackjack where you have a single bet. The real key to this game is playing correctly on your first two cards, because any mistake is compounded by later raises. Don’t go on hunches and get trapped adding raises on a hand that is big dog to even turn into a push.
Got burned once and lost everything I built up over four hours of play. Don’t play any poker loaded, not even one drink Smoking Man the house will crush you on any mistake. You need your mind completely clear.

#140 devore on 07.28.14 at 4:08 pm

#124 Robbie

some of the FSBO listings contained inaccurate information….e.g. rounding the MLS information of “1430 sq. ft.” to “1500 sq. ft.”

Oh, please, dimensions fields are hands down THE MOST unreliable pieces of data on MLS. You don’t have to look very far to find room sizes that are physically impossible on the lot the property is on. 1430 sqft is no more or less accurate than 1500.

#141 Flawed on 07.28.14 at 4:27 pm

#35 Flawed…”septic field…Govt Public Pension Plan…funded by taxpayers…” So true but I think England cut pensions away from public pension some years ago. Canada knows, at least, I hope they know.

********************************

Hell no. There is currently $600 billion in Public Sector pension liability for which there is NO money for. Who is going to be the politician who says

1. Tax raises to fund Mexican bound govt workers on the backs of tax payers.

2. Public Sector pensions to be funded 100% by public workers NOT the taxpayer.

#142 Kilby on 07.28.14 at 4:31 pm

#133 Mark on 07.28.14 at 3:17 pm
Let me clarify, perhaps I’m the only FSBO who priced their home 5-10k below comparables listed on MLS, so right away, lots of calls and viewings and a sale at 99% of asking price.
——————————————————————-

You are, most are not realistically priced and often the owners don’t know about the comparable in the area….
“You only need a 1 car garage” “Everybody likes gold taps and purple wallpaper” or “It had a new roof 10 years ago”

Mark, you priced it right. 25 years ago we sold a home privately, the local realtors appraised it at $99,500, we advertised for $89,000 and got full price very quickly but with prices the way they are now we like the coverage that we get from realtors and I would sooner have them deal with all the demands and flaky financing that seem to dominate the market today. We sold a condo on Vancouver Island a month ago and got a good price but the buyers were highly leveraged and changed financial institutions several times and there were 2 lawyers involved…It was worth it to let the realtor do all the juggling…Maybe getting too old for all the hassle..

#143 };-) aka Devil's Advocate on 07.28.14 at 5:00 pm

prohibative.

#121None on 07.28.14 at 1:12 pm
Hey DA – what do you think of the property disclosure form?

I think if you’ve got nothing to hide then don’t try hiding it and if you do have something to hide well it’ll catch up to you in the end one way or another.
FULL DISCLOSURE is my best practices advice.

And… don’t forget the Buyer should have their own representation which will have a fiduciary duty to protect their principle far more than the Sellers agent who has none.

#120Son of Ponzi on 07.28.14 at 1:06 pm
Talking about disclosure:
Depreciation reports are now required for Statas in BC since Dec. 2013. (unless council opts out).
Anyone have any insight if it impacted the market?

Depreciation reports were greatly feared and highly misunderstood at first but since the market seems to have settled down on the matter. They are an awesome addition to the mix. Think of them like a more complete home inspection you never really could have had done on the condo you were considering buying in that 70 unit building in which each share in a larger collection of mechanical systems etc.

#118-=jwk=- on 07.28.14 at 11:58 am
@ DA #64
You want to know the very foundation of “house porn”?
I can’t imagine putting certain, given, annual family events being placed at jeopardy by renting instead of owning.
What an AWESOME evening tonight was.. as it was last year and the year before that… AWESOME.
—————
I’m confused, we’ve been renting for going on 3 years now. We could not afford the 800,000 house we rent for $1500 (it was only worth about 600 when we moved in..) We have our annual BBQ weekend after the long weekend – next weekend!

Why would the party be in jeopardy? People come to see us and the kids, not the house.

Or are you saying if *you* rented, your family would refuse to visit you? I feel sad for you then.

I figured that one might catch a comment like that.

All I am saying is that when you rent you do not own and have no control. You might be asked to leave for a variety of reasons at ay given time and that could throw a wrench into your annual event for lack of an appropriate venue.

It’s “home” and there is a lot of tradition and emotion tied up in “home”. Rightfully so as we are a somewhat territorial species. Old habits die hard, cherished memories hopes and dreams harder.

We have rented before. Hated it compared to being in our own home. The kids hated it even more and we insisted they respect the landlords property more than if it were our own so that, many a time, put a damper on their fun.

But good for you that you, Bubbles, Ricky and Julian can get together in that rented “pad” of yours next door. (sorry couldn’t resist };-)

#144 Ontario's Left Coast on 07.28.14 at 5:24 pm

#139 :):(Ying Yang on 07.28.14 at 3:49 pm

Don’t play any poker loaded, not even one drink Smoking Man the house will crush you on any mistake. You need your mind completely clear.

Have you ever read anything he posts? I might be going out on a limb here, but no amount of abstinence is going to ‘clear’ that mind. My advice is keep drinking so as not to send your system into shock…

#145 AB Boxster on 07.28.14 at 5:27 pm

Most DIY sellers are greedy and simply pocket the money they’d pay in commission. Why would you want to buy that way? — Garth
—————————————————————————–

Garth,
When you suggest that investors should use ETF’s as part of balance portfolio, one important one being that the management fees for mutual funds are high for what they deliver, and that over time these fees can have a significant impact on portfolio value, this is ‘sound financial advice’.
However, when a person tries to save fees on the sale of a home, they are greedy.

Why is saving significant dollars one way OK, while saving significant dollars the other way is Not?
Especially given the obvious concerns of realtor and board behaviour.

I think that if FSBO was easier and more accepted that his would help shake out the bad behavior and monopolies of the boards and realtors.
You rightly complain about the status quo, but continually disparage a very important alternative that could actually bring about change.

Maybe if you supported this alternative, change would actually come to the RE industry.

If FSBOs passed on the savings from paying no commission, we’d all be better off. But they don’t. — Garth

#146 AB Boxster on 07.28.14 at 7:13 pm

If FSBOs passed on the savings from paying no commission, we’d all be better off. But they don’t. — Garth
————————————————————

OK,
But the alternative is that we continue to support the status quo, which sucks badly.

My experience with realtors has been awful.
We found the first house we bought ourselves, despite having a realtor, because the realtor we used had little interest in our business.
She was happy to share in the sales commission, though.

When we sold the house, the next realtor we used was absent from most showings, so we ended up showing the house ourselves to the actual buyers.
He was happy to share in the sales commission though.

When we were buying some property, active negotiations with the seller were somehow interrupted and sidetracked by an offer from a client of the listing realtor. Our realtor acknowledged that this was highly unethical but suggested that nothing could be done.
They were both happy to share in the commission though.

Some would say we need to find better realtors.

Maybe.
My experience was that we ended up doing most of it anyways so what am I paying for that is providing me any value?